Merger gives Equity 616 buildings

Chicago-based Equity Office Properties Trust said Friday it has agreed to acquire a California real estate company in a deal worth $7.2 billion.

Following the merger with Menlo Park-based Spieker Properties Inc., whose properties are concentrated on the West Coast, Equity will own and operate 616 office buildings nationwide. In a conference call, officials said the acquisition would significantly increase Equity's presence in Seattle, San Francisco and San Jose.

As part of the deal, Equity will issue about $1 billion in stock to Spieker's shareholders and assume $2.1 billion of the company's debt.

In the conference call Friday morning, Samuel Zell, chairman of Equity's board, said the deal would increase Equity shareholder value.

"Given that I'm a large shareholder, I have no greater incentive to augment shareholder value," Mr. Zell said.

Tim Callahan, the company's CEO, said buying Spieker bring assets to the company "that could not be (obtained) through a series of acquisitions."

In November, Equity Office Properties Trust backed out of a tentative agreement to purchase the 28-story 225 W. Washington St. building for more than $90 million, sources say. In mid-day trading, the company's shares were down slightly, to $28.41, after opening Friday morning at $29.